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2.04 U.S. Economy. Objective 2.04 Understand the United States’ economic system. A combination of a free enterprise (or market) and a command economy. Privately owned businesses and government both play important roles. The marketplace produces: cars health care technology
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2.04 U.S. Economy Objective 2.04 Understand the United States’ economic system.
A combination of a free enterprise (or market) and a command economy. Privately owned businesses and government both play important roles. The marketplace produces: cars health care technology food (with some government regulations) The government provides: defense education Mixed Economy
United States’ Mixed Economy Free Enterprise/Market Economy
Private property ownership. Freedom of enterprise and Choice Motive of self-interest Competition System of markets and prices The market addresses consumer wants Market Economy Characteristics
Market Economy Advantages • Individuals can own businesses and resources • Individuals can buy and sell goods and services • Competition in the market leads to greater choices • Consumers play a great role in the economy
Market economy Disadvantage • The critical role of the consumer in the market can create a tremendous divide between the poor and the wealthy
United States’ Mixed Economy Command Economy
The government helps protect people by being a body that monitors public safety through regulatory agencies such as: Food & Drug Administration (FDA) Occupational Safety and Health Administration (OSHA) Limited Government
Highways--roads and other transportation services Schools and other publiceducation services Social Security Medicare Defense and public safety The government provides some services to take care of people’s needs
Command Economy • Advantages • Consumers have some protection in the marketplace • Essential services are provided for citizens
Command Economy • Disadvantages • Citizens have to pay taxes so the government can provide services • Some think there is too much government control in the marketplace
Largest national economy in the world A mixed economy Corporations and other private firms make the majority of microeconomic decisions. Government has a minimal role in the domestic economy. Business firms in the U.S. have much less regulation than those in many other nations. United States’ Economy Summary